Final answer:
Strict government regulations can lead to barriers between employers and potential employees, inhibiting taquerias from hiring more workers despite the desire to offer higher wages. Such regulations can result in a higher natural rate of unemployment and discourage businesses from expanding their workforce.
Step-by-step explanation:
The question relates to the impact of government regulations on the labor market, specifically how they can deter taquerias and other businesses from hiring additional workers by setting wage restraints. Due to fairly strict labor laws, businesses like taquerias may face challenges in hiring more staff if they are prohibited from paying better wages. This is because such regulations can impose barriers to employment, leading to a higher natural rate of unemployment. Laws that make it difficult to fire or lay off workers, or that support powerful unions, can also result in businesses being hesitant to hire more than the minimum needed workforce.
Furthermore, government rules that wrap businesses in bureaucratic red tape, require multiple permits and fees, restrict products, or limit business locations and hours, can all dampen a firm's willingness to hire. This could have a direct effect on employment rates, as businesses may remain understaffed rather than deal with the difficulties of complying with extensive regulations.